purchased life annuity. Decision time

At those ages drawdown looks like a better prospect if you can handle the volatility of whatever investments you select.

If you want to get capital access now is a pretty good time to take the 25% tax free cash and move it into S&S ISAs in both names. Depressed values at present mean you'll effectively by moving more than your annual allowance into the ISA wrapper.

Drawdown is also a neater solution for the spouse provision, since the pot is inheritable, though with a significant tax charge that'll still be likely to be less than the cost of providing a 100% spousal annuity.

Now is a poor time to be buying fixed rate gilts but index-linked long term don't look so bad and there are also corporate bonds and funds like Invesco Perpetual Income that can be used to produce a fairly stable income and capital value, with inflation-countering capital growth.